The Nikkei was down 2.08% at 38,266.58 as of 0200 GMT and is poised to rise 0.9% for the week. The broader Topix fell 1.3% at 2,660.53 and is set to post a 1.55% weekly gain.
All three US stock indexes closed 3 percent lower on Thursday after Microsoft and Meta Platforms highlighted the growing artificial intelligence costs that could hit their earnings, curbing enthusiasm for megacaps that have fueled the market rally this year.
On Thursday, the Bank of Japan (BOJ) maintained ultra-low interest rates as widely expected, but its less dovish remarks lifted the yen against the U.S. dollar overnight.
A stronger yen tends to hurt exporter shares as it decreases the value of overseas profits in yen terms when firms repatriate them to Japan.
Global stocks, besides Asian, also slid on Thursday mainly as investors fretted over results from tech giants and remained risk-averse ahead of a coin-toss US election.Data showing the US Federal Reserve’s preferred inflation measure cooled further last month — and now sits just above its long-term target — failed to boost sentiment, despite being a positive sign for future interest-rate cuts.Analysts have also been monitoring the rise in US Treasury bond yields amid expectations the Federal Reserve may back off significant interest rate cuts, amid US economic data that has generally been solid.
“With the US election just around the corner, many investors are adopting a more cautious stance, sparking speculation of a much-anticipated correction in the S&P 500,” said City Index and FOREX.com analyst Fawad Razaqzada.
The uncertainty of whether Kamala Harris or Donald Trump will emerge victorious in Tuesday’s election buoyed safe haven gold, which touched a fresh high of $2,790.10 an ounce on Thursday.
In Europe, both Frankfurt and Paris ended the day lower around one percent after official data showed the eurozone’s annual inflation rebounded more than expected in October due to rising food costs.
Shares in French bank Societe Generale jumped over 11 percent after it reported better-than-expected results.
Meanwhile its rival BNP Paribas saw its shares slump nearly five percent after results fell short of expectations.
London shed 0.6 percent after the new center-left government unveiled major tax hikes, mainly targeted at businesses, in its maiden budget.
“This was one of the largest increases in tax, spending and borrowing in the UK’s budget history,” said Kathleen Brooks, research director at XTB.
“For a government that planned to boost growth, they have fallen spectacularly at the first hurdle,” she added.
Tokyo fell by half a percent, weighed down by a stronger yen and a drop in stocks linked to the semiconductor industry, which also dipped on Wall Street.
Mainland Chinese markets, however, made healthy gains following a forecast-beating manufacturing report — in a piece of rare good news for leaders struggling to boost activity in the world’s second-largest economy.
Oil prices continued their rebound, fueled by good news on demand from the United States, as well as by press reports that OPEC countries are considering postponing an increase in crude supply.
